If during the year you, as a director or employee, received payments from clients for company services or goods into your personal account — make sure to transfer these funds to the company account before the end of the reporting year.
Also remember: all amounts received in your personal account must be supported by proper documentation — invoices and receipts.
What if the money has already been spent?
In this case, the transaction should be documented with invoices and receipts only.
If the company earns income but clients transfer funds to the director’s personal account and these funds are not passed to the company, the issue is typically resolved by recording a loan from the company to the director.
What happens if the director does not recognize these funds as company income?
In this case, the funds will be treated as personal income of the director. These amounts must be included in the personal tax return and are subject to personal income tax (PIT).
Important:
If the total amount received exceeds 1.8 million THB, the director will be required to register for VAT.
Check your primary documentation
- Are there invoices and receipts for all incoming payments?
It is common that when payments are received from individuals into a company account, documentation is overlooked — especially by non-VAT payers. As a result, by year-end, many unidentified transactions may appear, which then have to be documented in bulk before financial reporting.
- Have you received withholding tax (WHT) certificates from all corporate clients who paid your company?
If the tax was not withheld, this is the counterparty’s responsibility. However, it is important to resolve the issue before year-end and obtain the WHT certificates.
Pay contractors on time
If you received a commission, part of which must be paid to a co-agent, but have not done so before year-end, you should inform your auditor so that these liabilities can be excluded from the taxable base (if applicable).
However, as a safer approach, it is better to settle such payments before the end of the reporting period. The same applies to staff bonuses.
Final recommendation
Most importantly — estimate your corporate income tax liability before the end of the year to avoid unexpected obligations.
Author: Alexandra Agapitova.
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